In the decade following the collapse of the Soviet Union, Central Asian neighbors Kazakhstan and Kyrgyzstan -- and their presidents, Nursultan Nazarbaev and Askar Akaev -- have maintained close ties. Now, however, different economic circumstances may force these two traditionally close countries to set off in different directions. In this second of a two-part series, RFE/RL correspondent Bruce Pannier looks at how the countries' financial futures may cause a shift in the way each looks at democratic reform.

Prague, 27 July 2001 (RFE/RL) -- Since Kazakhstan and Kyrgyzstan both gained independence in 1991, the internal politics of the two countries have been similar, with each seeing a clampdown on the opposition and a broadening of executive powers. However, of all the CIS Central Asian states, Kazakhstan and Kyrgyzstan are traditionally considered the most liberal.

Kyrgyzstan in particular is considered the region's least-repressive nation. Nelson Ledsky is the Eurasia program director for the National Democratic Institute in Washington. He says that despite certain setbacks, there are still signs democracy is present in Kyrgyzstan:

"There are some positive things one can say about developments in Kyrgyzstan. There are some excellent legislators who are trying to make the parliament work. There are some excellent civic leaders who are trying to make local government and civil society work." Cassandra Cavanaugh, recently of New York-based Human Rights Watch, agrees that the situation in Kyrgyzstan is better than that in Kazakhstan:

"Kyrgyzstan is a very interesting case just because there is so much potential political activity in the country. A huge proportion of the population, relative to the other countries at least, does support political parties, does try to make their view known through demonstrations and through other means."

It's a picture, Ledsky says, that contrasts sharply with Kazakhstan:

"We haven't seen the development in Kazakhstan of a representative parliament. We haven't seen the development of an independent court system. We have not seen the development of a free press, or free media. We've not seen the development of an open society. Quite the contrary -- wherever openness [once] existed, it's closing."

This situation could soon reverse itself, however, as Kazakhstan stands poised for strong economic growth, while Kyrgyzstan's economy stagnates.

Kyrgyzstan still depends in large part on farming for its economic base -- despite being a mountainous country where only 7 percent of the land is arable.

In the past, the presence of gold ore offered hope for a bright economic future. But gold prices remain depressed and the country's gold-mining industry -- managed in large part by the Canadian firm Cameco -- has not resulted in any financial boom. Oil-rich Kazakhstan, on the other hand, has made some sound economic decisions. Keith Crane from the PlanEcon consulting group in Washington explains:

"[Kazakhstan] privatized early on and sold some very important assets to Western investors who seem to know what they're doing. There is an iron-steel works in Karaganda which has been taken over by Ispat, an Indian company, [which has taken it] from a situation where they didn't pay workers' wages and were behind in taxes [to a company that] has really done quite well over the past years. Of course, Tengiz, where Chevron [oil company] has made a major investment, has been very successful."

Crane says the economy in Kazakhstan grew by almost 10 percent last year, and his organization forecasts a jump of more than 8 percent this year. He also says that in dollar terms, average monthly wages in Kazakhstan are about $100, putting it not far from Russia's average monthly wage. Kyrgyzstan, by contrast, has an average monthly wage of $25.

If all goes according to schedule, Kazakhstan will be on the verge of becoming a relatively wealthy nation in 10 years. Major oil-export routes are under construction, including the Caspian Consortium Pipeline, which is scheduled to open this fall.

And, according to Ledsky of the National Democratic Institute, oil may prove the salvation of more than just the economy:

"An expanding, growing, prosperous economy should be of assistance to democratic development [in Kazakhstan]. The textbooks would suggest this."

But Cavanaugh of Human Rights Watch says such an outcome is not guaranteed, and points to another oil-rich country where democracy has failed to take hold:

"If you look at conditions in other countries which have achieved quick oil wealth, I don't think it correlates necessarily with an improvement in human rights. People point to Nigeria as an example, as sort of an idea of the potential disaster awaiting Kazakhstan; I mean a case where the government is riddled by corruption, where there's no transparency in the use of that income. I think that [oil wealth] could even be a harbinger of future restrictions in rights, because people are going to be wondering where all that income is going."

"One can argue that for a country like Kyrgyzstan, the only way prosperity can ever be achieved is if the country and the people of the country work together, work in harmony, work to support common agricultural and social policies. In fact, democracy may be even more necessary in Kyrgyzstan if there's going to be any success."

Kazakhstan and Kyrgyzstan are perhaps the only genuine allies in Central Asia -- a bond emphasized by the two countries' presidents, who are even related to each other through the marriage of their children. But as one country grows rich and the other becomes poorer, future ties are unpredictable at best.